Keurig Dr Pepper Inc. (NASDAQ:KDP) stock traded higher on Thursday after the beverage maker reported second-quarter results that topped Wall Street expectations on both earnings and revenue. The company also reaffirmed its full-year 2026 sales and adjusted earnings outlook.
Keurig Dr Pepper owns, manufactures, markets and distributes a portfolio of more than 150 hot and cold beverages. Its brands include Dr Pepper, Canada Dry, Snapple, Green Mountain Coffee Roasters, 7UP, A&W and The Original Donut Shop.
Adjusted earnings came in at 57 cents per share, beating the analyst consensus estimate of 54 cents. Revenue increased to $7.31 billion, ahead of expectations of $7.24 billion.
On a GAAP basis, net sales jumped 75.6% year over year, largely reflecting the acquisition of JDE Peet’s. Excluding the acquisition, legacy Keurig Dr Pepper’s net sales rose 7.3%, driven by 4.2% favorable pricing and 3.1% volume/mix growth. Adjusted diluted EPS increased 16.3% to 57 cents.
CEO Tim Cofer said the company delivered a strong second quarter, with earnings per share exceeding expectations. He highlighted double-digit sales and profit growth in the U.S. Refreshment Beverages segment, sequential improvement in the international business and solid performance from the combined coffee platform, as strength at JDE Peet’s helped offset continued weakness in the U.S. Coffee business.
Cofer also said the company made progress on its integration and planned separation efforts, captured initial cost synergies, advanced organizational readiness, generated strong free cash flow to reduce debt and remains on track to meet its 2026 financial and transformation goals ahead of the planned separation in early 2027.
Segment Performance
U.S. Refreshment Beverages revenue increased 10% to $2.9 billion, supported by 6.5% volume/mix growth and 3.5% pricing. Adjusted operating income for the segment rose 11.9%.
U.S. Coffee revenue declined 3.2% to $918 million as lower volume more than offset price increases. Adjusted operating income fell 24.7% because of inflationary pressures, weaker volume and higher marketing spending.
KDP International revenue climbed 19.6% to $664 million, or 12.4% on a constant-currency basis, driven by both pricing and volume growth. The JDE Peet’s business contributed $2.8 billion in revenue following the acquisition that closed on April 1.
Cash Flow And Balance Sheet
Operating cash flow totaled $895 million during the quarter, while free cash flow reached $714 million. The company ended the quarter with $1.52 billion in cash and cash equivalents.
Outlook Reaffirmed
Keurig Dr Pepper reaffirmed its full-year 2026 outlook, continuing to expect revenue of $25.9 billion to $26.4 billion, in line with the analyst consensus estimate of $26.27 billion.
The company also maintained its forecast for low-double-digit constant-currency adjusted EPS growth and reiterated its target to end 2026 with a pro forma management leverage ratio of about 4.1x.
KDP Price Action: Keurig Dr Pepper shares were up 1.63% at $31.25 during premarket trading on Thursday, according to Benzinga Pro data.
Photo via Shutterstock